How do you know a loudspeaker is the best?

Trust YOUR ears... grasshopper. As mentioned above, listen to acoustic, not electric, musical instruments and then try to find speakers that closely reproduce those sounds. Drums, cymbals, guitar, piano, violins, etc, are key, somewhat depending on what kind of music you listen to. Horns, of course, are also important, but like vocals, can suffer more from recording imperfections, than actual limitations in the equipment. Listen...it's all good!!!
Sonny

I second Newbee and other's comments about the context of the speaker use. The combination of source, amp and cabling make a huge difference on how a speaker sounds. A balance of budget and a blend of attributes will create a sound that is unique in your room. Making those decisions and discoveries is part of the fun of this hobby for me. I think that experience is also important as you said in your question. I evaluate sound very differently with each major upgrade in equipment.

Your question suggests that you have no basis for evaluating the quality of a speaker. The only thing I can assure you of you don't measure it by its cost, size or type. Design and quality of parts/built are very important but they don't make a speaker "great" either.

If I were to assume that you already had the best electronis and sources, then I would say the speaker that is "best" is the one that sounds best to you in your room. That is YOUR great speaker. But if you don't have the best room, or the best components, that same speaker may produce sounds that lead you to believe it is a POS or some such negative evaluation, but another speaker may work just fine with the same stuff (this indicates a probable mismatch between the speaker and you room and/or electronics.

It's really about your room, your expectations, your finances.

After years of saving, I finally have accumulated enough to buy some top-rate speakers. For the last year, I have been going from dealer to dealer auditioning speakers. I started off with some B & W 705s. Something was missing. Went to another dealer and listened to the B & W 805s & 802s. Better sound, but I still wasn't satisfied. Went to NYC several times. Heard the Revel, Dynaudio,Vandersteen 5A, and Wilson WATT 7. Still wasn't hearing everything I was anctipating. Then I heard the B & W 800s. And all of a sudden I heard everything I wanted to hear in a speaker. (By the way I kept bringing the same CD's to the auditions).
I share this with you not to sell you on the B & W s; but to inform you of the process I went through to find speakers that worked for me.
As some of the other correspondents suggested, keep listening until you find the speakers that work for you.

Listen to really high end speakers so you know what's possible -- then, try to get as much of that; Coherence, natural detail, resolution, sound staging, air, extension, tight bass, musical, etc. as you can at the price range in which you're shopping.

Adding to Aroc's comments, when the instruments start sounding the same as you described in your step3 Marakanetz, it is more likely that you've become a good player of many instruments than having the best speakers.

Marakanetz, as a musician, the instrument always sounds much different when you playing it as a musician than when you are listening to it as an audience member. The vantage point is greatly different and some of the sound is likely being inducted through your body and bones.

It's sort of the like the descrepency you notice between yourself speaking and a recording of yourself speaking - although that is an extreme example.

gunbei said it best.

i recently fell in love with a pair of mcintosh xrt 28 speakers during an audition & was seriously thinking about buying them until i came back home & gave a serious listen to my xrt 22's.

the longer i have the 22's the more i love every thing about them.

gunbei is 100% on target,when you find them you'll know & you'll know in a big way.

mike.

1. Go to music store and play some instrument(a couple of notes or so)
2. Go back home play the same instrument through your system.
3. Repeat steps 1 and 2 many times for different possible instruments until the instruments in music store sound near-same in your rig where you have YOUR best speakers.

You don't... and you keep on searching!

when you find yourself smiling ear to ear unable to utter anything that makes sense and have to be dragged out of the listening room,,,

When you feel that you no longer need to search for another pair of speakers, you know you've found the right ones for you.